EURUSD is approaching a critical level ahead of Wednesday’s Fed rate decision and press conference.
Can bulls hold the line, or will the recent breakout fail?
That’s the question every trader is asking as we approach this week’s volatility.
While the outcome is uncertain, we can use key chart levels and higher time frames to gauge the likely scenario.
Currently, EURUSD is holding above critical support at 1.0780, the 2021 trend line support.
This level, which the euro broke out from a few weeks ago, will likely come under pressure during Wednesday’s FOMC.
Simultaneously, the US Dollar Index (DXY) is nearing the 105.00 resistance area discussed in recent videos.
This points to a potential bounce for pairs like EURUSD as we near Wednesday’s Fed rate decision.
However, trading EURUSD or any currency pair ahead of the FOMC is risky.
It’s often best to let the volatility settle post-FOMC before making decisions.
If the euro can bounce from the 1.0780 region and reclaim levels like 1.0840 and 1.0865 on higher time frames, we could see the recent uptrend continue.
Alternatively, a daily and weekly close below the 2021 trend line at 1.0780 would confirm a failed breakout (fakeout) and expose 1.0700.
